Lexicon Financial Group Weekly Update — March 25, 2026

Mar 27

“We are drowning in information but starved for knowledge.”

— John Naisbitt, an American author and public speaker in the area of futures studies

From the desk of Craig Swistun, CIM, MFA-P, Portfolio Manager, Raymond James Investment Counsel, and Wayne Hendry, Client Relationship Manager, Raymond James Investment Counsel

ISSUE 221

Looking Around

Global stock markets have dealt with a lot this year. By now, we are all acutely aware of the conflict in Iran and the impact on oil prices as a result of the closing of the Strait of Hormuz. Just look at the prices at the pump. But, while these events may have been the spark that ignited higher market volatility, there is something else that has been fanning the flames.

Years ago, we thought we were living in the information age. Today, though, it feels like we are firmly living in the social media age. And sometimes, social media provides us with news. At other times, it provides us with noise.

Social media, it seems, is playing an outsize role in driving market volatility.

There’s an old saying in capital markets: “buy on rumour, sell on news.” This saying sums up a “strategy” where traders make decisions based on speculation rather than deep research. Rather than studying long-term trends, traders react to fresh information that can instantly move prices in financial markets. This is often referred to as trading the news and highlights how markets tend to react more strongly to speculation than to the actual outcome of an event.

For example, traders might react strongly to unscheduled news: natural disasters, surprise geopolitical developments or sudden announcements. Trading takes place as speculators try to get ahead of the actual news: central bank meetings, inflation reports, company earnings reports. But perhaps precisely because rumours are not scheduled or regular, they lead to increased volatility. Frankly, it leaves disciplined “evidence-based” traders scratching their heads since the data often doesn’t support the investment hypothesis.

Let’s imagine a company called FakeCorp. A rumour (possibly fake news) begins circulating on a Reddit blog that FakeCorp is poised to release a new artificial intelligence (AI) chip that is ten times faster than competitors. Traders who believe the rumour will start to buy the company’s stock. Social media posts explode, and demand pushes up the value of the stock.

Then, a week later, FakeCorp announces that they indeed have a superior chip, but it is only five times faster than competitors, not ten. Rumours have driven the stock up, but some of the early buyers decide to lock in their profits. They sell on the news. The value of the stock drops.

But why? Expectations of a ten-times performance improvement get “priced in,” so the actually new, while disappointing, development is no longer a surprise. And, while news rarely exceeds the hype, prices cool off but not before early traders make a profit.

Of course, if rumours turn out to be false and FakeCorp has no enhancements at all, the stock price will tumble. Quickly. There is a disconnect between rumours and actual news. It’s a pattern that seems to happen over and over again, but in the social media world, rumours have been accelerated.

A real-world example here is what happened to the stock of Oracle in 2025.

In September 2025, Oracle delivered what was viewed as a “truly awesome” quarter. This was driven by a surge in demand for its AI cloud infrastructure, including several multi-billion-dollar contracts and a jump in its backlog of future committed revenue. As news of these results spread, Oracle’s shares soared approximately 36 per cent in a single day, marking the steepest rise since 1992. This gain significantly boosted founder Larry Ellison’s net worth to the point where it allowed him to surpass Elon Musk as the world’s richest person. However, much of the buying occurred once the quarterly results were released and history shows that after such sharp gains, traders who entered early on speculation or rumours may choose to lock in profits, leading to a pullback in the days following the news.

Geopolitical events can also trigger this, wherein rumours of progress in peace negotiations might push the price of a commodity, like oil, lower when the deal is formally confirmed but then reverse because the outcome was already priced in by the market.

In recent weeks, especially with the conflict in Iran, rumours abound. Trading is taking place on rumours of increased attacks, or pausing of attacks, on keeping the Strait of Hormuz closed or open. Markets swing wildly based on the prevailing point of view of the day.

We believe it is a diversified, disciplined approach that helps us avoid some of the most common risks:

Volatility - News releases often cause sudden and sharp price swings. This volatility can create opportunities, but it can also increase the chance of losses if the market moves against the news.
Slippage - In fast-moving markets, orders may be filled at a different price than expected, particularly around unscheduled or highly impactful news.
Sudden Reversals - Even if the news aligns with forecasts, markets may react in the opposite direction once traders begin to take profits.
Liquidity Gaps - In moments of extreme reaction, liquidity can dry up. This makes it harder to enter or exit positions at intended price levels. (1)

We don’t act on rumours. We do our research, make decisions, and share our thoughts and findings with you every week in our report.

Of course, should you have any questions, please feel free to reach out.

Read and Watch

Want deeper insight into topics in your Weekly Update? Then, read and/or right click:

Video: How is Canada's economy managing the growing energy crisis?

The U.S. Economy Is Insulated From High Oil Prices. Americans Aren’t.

Video: Iran War: What It Means for Europe's Economy and Inflation | The Pulse 3/20

What Are the Implications of the Iran Conflict for Japan?

China's economy builds early momentum in 2026 as global risks mount

Video: Raymond James Markets & Investing: Why the US economic outlook remains resilient amid oil disruption - CIO Larry Adam, March 20, 2026

Raymond James Economy & Policy: Let the games begin: markets vs. the Fed - Chief Economist Eugenio J. Alemán, March 20, 2026

Looking Back

The impacts of the Iran war continue to roil markets globally.

In Canada, the Toronto Stock Exchange's S&P/TSX composite index (TSX) fell last week, amid broad declines ‌across all major sectors, including materials (due to spot gold and silver tumbling) and energy. This is the third straight weekly loss, and the TSX was down 1.2 per cent as of March 20, 2026. The war-driven jump in crude prices has fueled inflation concerns and Canada's resource-heavy index is especially sensitive to ⁠oil-price swings because the commodity is among the country's top exports.

The Bank ⁠of Canada kept interest rates on hold last week and stressed its readiness to hike rates if inflation pressures grow. There was a bit of good news on the economic front. According to Statistics Canada, Canadian retail sales rose in January to C$69.65 billion ($50.81 billion), up 1.1 per cent from the previous month, driven by stronger sales at motor vehicles and parts dealers, said on Friday. (2)

Volatile United States (U.S.) stock markets finished lower last week, amidst continued geopolitical tensions and the resulting volatility in oil prices, persistent inflation concerns, and a somewhat hawkish interpretation of the Federal Reserve’s (Fed) latest policy signals and its leaving the target range for its federal funds rate unchanged at 3.5 to 3.75 per cent. Adding fuel to inflation worries, the Bureau of Labor Statistics report last Wednesday noted that producer price index growth had accelerated in February – rising 0.7 per cent, up from 0.5 per cent in January and the highest reading since July 2025. On an annual basis, the index rose 3.4 per cent, up from 2.9 per cent in the previous month. Both of these readings were ahead of consensus estimates.

All of the major European stock markets, including the pan-European STOXX Europe 600 Index, declined significantly last week. Despite surging energy prices, the European Central Bank (ECB) kept interest rates on hold at its policy meeting on Thursday. However, ECB President Christine Lagarde warned that higher prices for oil and gas will have a “material impact” on near-term inflation and noted that the ECB will be keeping a close watch on developments in the Middle East to calibrate its policy response. The ECB raised its inflation forecast for 2026 to 2.6 per cent, up from 1.9 per cent in December. Annual inflation in the eurozone rose to 1.9 per cent in February.

Japan’s stock markets fell last week in what was a holiday-shortened week. Japan relies heavily on oil and gas imports for its energy needs, so investor concerns about energy costs persisted, despite Japan’s government releasing oil from its strategic reserves to help stabilize domestic supply and limit price increases. With geopolitical tensions clouding the outlook, the Bank of Japan (BoJ) left its policy interest rate unchanged at 0.75 per cent, as widely expected. However, BoJ Governor Kazuo Ueda warned that higher oil prices could weigh heavily on economic growth by worsening Japan’s terms of trade and increasing inflation.

Chinese equity markets fell last week, as rising energy prices tied to Middle East tensions added to persistent concerns over weak domestic demand and limited government policy support. Tariffs resurfaced as China pushed back against the U.S.’s new Section 301 investigations into the manufacturing policies of major trading partners with a focus on excess capacity in strategic industries. U.S. Trade Representative Jamieson Greer stated that the probe could trigger tariffs on imports from China, India, Japan, South Korea, Mexico, and the European Union as early as this summer. The Chinese government has called for dialogue while signaling it will defend its interests. (3)

The opinions expressed are those of Craig Swistun and not necessarily those of Raymond James Investment Counsel which is a subsidiary of Raymond James Ltd. Statistics and factual data and other information presented are from sources believed to be reliable, but their accuracy cannot be guaranteed. It is furnished on the basis and understanding that Raymond James is to be under no liability whatsoever in respect thereof. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Raymond James advisors are not tax advisors, and we recommend that clients seek independent advice from a professional advisor on tax-related matters.